What is the definition of accrued revenue?

Accrued revenue refers to revenue that has been earned by providing goods or services but has not yet been collected in cash or recorded as receivable. This concept is an essential part of accrual accounting, which ensures that revenues are recognized when they are earned, regardless of when the payment is actually received.

In the context of this definition, the chosen option accurately reflects the essence of accrued revenue. It highlights that even though the revenue has been earned, the actual cash has not been received at that point in time, which aligns with the principles of recognizing income based on earned services or goods delivered.

Understanding accrued revenue is fundamental to maintaining up-to-date financial statements, as it affects both the income statement and the balance sheet. By properly accounting for accrued revenue, businesses can present a more accurate view of their financial performance and position.